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    PACS
    Earnings call· Dec 2025(Q4 FY25)

    PACS Group Q4 FY25 earnings call PACS

    Feb 26, 2026 Source

    Executive summary

    PACS Group Q4 FY25 — Record Performance and Strategic Integration

    PACS Group concluded FY25 with record financial results, driven by successful integration of prior acquisitions and disciplined operational execution. The company's locally led, centrally supported model continues to enhance clinical quality and efficiency across its expanded footprint. Management is optimistic about 2026, focusing on optimizing the portfolio, investing in people, and pursuing selective, strategic acquisitions while maintaining a strong capital position.

    Highlights

    5

    • Full-year 2025 revenue reached $5.29 billion, representing approximately 29% growth over 2024.

    • Full-year 2025 adjusted EBITDA totaled $505 million, marking record performance for the company.

    • Approximately 73.4% of the skilled nursing portfolio (207 facilities) achieved 4 or 5 stars in CMS quality measures.

    • Mature facilities maintained exceptional occupancy levels, averaging 94.9%, an increase of 0.5% from the prior year.

    • The company ended the year with a strong balance sheet, reflected by net leverage of approximately 0.3x.

    Guidance & targets

    3
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $5.65 billion to $5.75 billion
    high materiality
    High
    Full-year 2026 Adjusted EBITDA
    $555 million to $575 million
    high materiality
    High
    Acquisition Activity (2026)
    Approximately 5 facilities per quarter
    medium materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Mature Facilities
    Mature facilities continue to perform at a very high level, reflecting sustained demand and clinical consistency across established operations.
    Occupancy: 94.9%
    		—0.5%——
    Ramping Facilities
    Year-over-year change reflects the graduation of facilities and corresponding shift between cohorts. These facilities, many acquired at lower occupancy, are progressing through integration and stabilization. Expected to see continued growth in occupancy and skilled mix as they move toward mature status.
    Occupancy: 86.3%
    		—down from >93%——
    New Facilities
    Reflects the onboarding and stabilization period for a significant number of facilities acquired in the back half of 2024. Progression from new to ramping to mature is viewed as a durable source of embedded organic growth.
    Occupancy: 81.1%
    		—down from 82.8%——

    Operational metrics

    24
    Revenue
    $1.36Bup ~12% YoY
    Q4 FY25

    Fourth quarter performance reflects continued occupancy strength, stable skilled mix trends and consistent execution.

    Net Income
    $59.8M
    Q4 FY25

    Fourth quarter performance reflects continued occupancy strength, stable skilled mix trends and consistent execution.

    Adjusted EBITDAR
    $237.7M
    Q4 FY25

    Fourth quarter performance reflects continued occupancy strength, stable skilled mix trends and consistent execution.

    Adjusted EBITDA
    $142.1M
    Q4 FY25

    Fourth quarter performance reflects continued occupancy strength, stable skilled mix trends and consistent execution.

    Revenue
    $5.29Bup ~29% YoY
    FY25

    Reflecting the full year contribution from newly acquired facilities in 2024 as well as same-store growth from the core portfolio.

    Net Income
    $191.5M
    FY25

    These results represent record performance for PACS.

    Diluted Earnings Per Share
    $1.22
    FY25

    These results represent record performance for PACS.

    Adjusted EBITDAR
    $883.9M
    FY25

    These results represent record performance for PACS.

    Adjusted EBITDA
    $505M
    FY25

    These results represent record performance for PACS.

    Total Occupancy
    89.1%
    FY25 average

    Portfolio performance remains strong.

    Average CMS QM Star Rating
    4.4up from 4.3 in 2024
    FY25

    Meaningfully above the industry average of approximately 3.5.

    Facilities with 4 or 5 CMS QM Stars
    207
    as of 2025-12-31

    Reflects encouraging trends in quality ratings.

    Total Facilities
    321
    as of 2025-12-31

    Across 17 states.

    Total Operating Beds
    35,379
    as of 2025-12-31

    Reflecting a scaled and geographically diversified footprint.

    Patients Cared For Daily
    >31,700
    daily

    Supported by over 47,000 dedicated team members.

    Net Leverage
    ~0.3x
    year-end 2025

    Even after substantial acquisition activity in 2024 and continued capital deployment in 2025, providing meaningful financial flexibility.

    Cost of Services Growth
    25%YoY
    FY25

    Driven primarily by platform growth and continued clinical and operational investments across all cohorts.

    General and Administrative Expenses Growth
    21%YoY
    FY25

    Reflecting the scaling of both PACS Services and regional infrastructures with enhanced compliance, risk management, accounting, and technology.

    Facilities with Owned Real Estate
    102
    as of year-end 2025

    Continued selectively increasing ownership of certain real estate in 2025.

    Average Remaining Lease Term
    ~13 years
    as of year-end 2025

    Lease profile remains stable.

    Average Remaining Lease Term
    ~22 years
    as of year-end 2025

    Lease profile remains stable.

    Capital Deployment
    >$145M
    Q4 FY25

    Funded from existing liquidity.

    Administrator in Training (AIT) Program Members
    38
    current

    Building a scalable bench of highly skilled operators prepared to step into leadership roles.

    Zero-Deficiency Surveys
    7
    2025

    Meaningful accomplishment in today's regulatory environment, reflecting consistent compliance.

    Industry KPIs

    4
    MetricValueDetails
    Utilization trends89.1%%
    Stars rate environment4.4stars
    Membership covered lives by line>31,700patients
    Adjusted EPS EBITDA leverage guidance$1.22USD

    Deals & partnerships

    2
    Multiple counterpartiesAcquisition of additional facilities within existing markets to increase density and deepen local scale.

    Executed on 8 additional strategic acquisitions in 2025, all within existing markets.

    Multiple counterpartiesAcquisition of 3 additional facilities, expanding within existing markets and selectively increasing real estate ownership.

    In January [2026], PACS announced the acquisition of 3 additional facilities, 2 in Alaska and 1 in Idaho, including the purchase of the underlying real estate for the 2 Alaska properties.

    What to watch in Q1 FY26

    5

    Ramping facilities occupancy improvement

    next quarter
    Current86.3%
    TargetContinued growth

    Why it matters

    The progression of ramping facilities towards mature status is a key driver of embedded organic growth and margin expansion.

    We expect continued growth by way of occupancy and skilled mix as this cohort moves toward mature status.

    Q&A highlights

    6

    How does PACS's high quality ratings translate into payer conversations and potential share gain opportunities, particularly regarding cost-effectiveness in post-acute care?

    Management stated that their model of acquiring facilities, deploying their operating model to improve quality, and achieving strong quality metrics makes them an attractive partner for insurers. This allows them to negotiate strong contracts, especially as facilities mature. They expect this trend to increase, leading to margin expansion as facilities move from lower to higher quality.

    “As we go into these facilities upon acquisition, we deploy our operating model, which begins with providing high-quality care. And as you mentioned, we feel that as we move those facilities toward the quality metrics that we've been able to prove out through the new ramping and mature cohorts, we become a very attractive partner for really any of the insurers in the space that are looking for places to send their patients with high-quality care, access to bed, bed availability, density.”

    asked by David MacDonald · answered by Joshua Jergensen

    2 min read6 chapters

    Detailed Narrative

    01

    Operational Excellence and Integration

    Following transformative growth in 2024, PACS Group focused on successfully assimilating acquired facilities into its operating model during 2025. This involved enhancing infrastructure, systems, and compliance structures to support a larger and more complex platform. The company views this work as crucial for sustainable growth and positions it for continued disciplined execution as a public entity.

    02

    Strategic Acquisitions and Footprint Expansion

    In 2025, PACS executed 8 additional strategic acquisitions within existing markets, increasing density and local scale. The portfolio now comprises 321 facilities across 17 states, with 35,379 total operating beds (32,854 skilled nursing and 2,525 assisted living). This expansion provides geographic and payer diversification, supported by a deep bench of leadership.

    03

    Clinical Quality and CMS Star Ratings

    The company reported encouraging trends in quality ratings, with 207 facilities (73.4% of its skilled nursing portfolio) rated 4 or 5 stars in CMS quality measures as of December 31, 2025. The average CMS QM star rating for mature facilities improved to 4.4 in 2025, up from 4.3 in 2024, significantly above the industry average of 3.5. An example highlighted a Kentucky facility improving from 2 to 5 stars within a single year through data-driven action plans.

    04

    Zero-Deficiency Surveys and De Novo Success

    PACS achieved 7 zero-deficiency surveys across its portfolio in 2025, reflecting consistent compliance and a culture prioritizing quality. The Oceanside, California facility, a newly built ground-up skilled nursing facility, completed its initial certification survey with zero deficiencies in April 2025. This facility reached profitability within its first year and saw over 250 admissions, demonstrating the effectiveness of investing ahead of revenue and building clinical excellence.

    05

    Capital Allocation and Balance Sheet Strength

    Capital allocation remained disciplined, shifting focus towards optimizing acquired assets and selectively increasing real estate ownership. The company invested over $145 million in Q4 2025 for property purchases and acquisitions, funded from existing liquidity. Despite significant growth, PACS maintained a strong balance sheet, ending the year with net leverage of approximately 0.3x, providing financial flexibility for future organic and inorganic growth.

    06

    Leadership Development and Industry Outlook

    PACS continues to invest in leadership development through its Administrator in Training (AIT) program, with 38 AITs currently building a scalable bench of skilled operators. The company believes its scale, operating model, and strengthened infrastructure position it as a responsible consolidator in a fragmented industry, benefiting from sustained growth in the aging population and increasing demand for post-acute services.

    AI-generated summary of the company’s earnings call. Not investment advice.